Costello pledges frank advice on Qld finances

Former federal Liberal treasurer
Peter Costello
said he would give “fearless and frank advice" to the Queensland Liberal National Party government in a bid to overhaul the state’s finances.

As revealed in The Australian Financial Review yesterday, Mr Costello will be heading the commission of audit established by the Newman government. It will make recommendations to help restore Queensland’s budget back to surplus and restore the AAA credit rating.

Outgoing Queensland Investment Corporation chief executive Doug McTaggart and economist and academic
Sandra Harding
will also be part of the commission which will deliver an interim report to Premier
Campbell Newman
and Treasurer
Tim Nicholls
by June 15.

A second report outlining interim recommendations will be due by November, with a final report – to outline long-term policy options for the state – by the end of 2013.

Mr Costello, who recently missed out on becoming chairman of the Future Fund in favour of David Gonski, said he was looking forward to the challenge of helping Queensland reclaim its AAA credit rating, the same task he undertook when he become federal treasurer in 1996.

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“The truth is the policy decisions will always be made by the government of the day," Mr Costello said. “But you make better policy if you have fearless, honest and open advice and I will be doing that.

“Part of the reason I’m attracted to doing this audit is because it’s long term and it will be providing a range of options over the next few decades."

The Melbourne-based Mr Costello said he would spend two days a fortnight on the commission which will be funded from the existing budget of Queensland Treasury.

The commission will have a broad brief to look at the state’s debt, revenue and expenditure, as well as assess the state’s government-owned corporations. It will also assess the implications of the change in formula to redistribute GST revenue as well as look at budget papers for any other contingent liabilities “that should be brought to the government’s attention".

Mr Nicholls said the incoming brief from Treasury showed Queensland’s current financial position, with total debt five times the level it was a decade ago, was unsustainable.

“We need to begin to chart a path to return Queensland’s fiscal strength and restore the AAA credit rating. That is why we’ve created this audit," he said. “I’m not pre-judging any outcome of the commission."

Mr Nicholls defended the appointments from Labor’s claim it was further evidence of “jobs for mates" following four former Brisbane City Council executives and two LNP members being appointed to run the state’s public service.

Dr McTaggart, who was under-treasurer for the conservative Borbidge government in 1996-98, said the commission would explore all options to improve the state’s bottom line, including asset sales. “It will be putting all options on the table, it has to. I think this is a great opportunity for the state," he said.

Last month, Dr McTaggart, who is also a member of the COAG Reform Council, called on both the ALP and the LNP to consider more asset sales to improve the state’s ailing balance sheet.

Mr Nicholls yesterday reaffirmed the LNP government’s position to not sell any assets in its first term saying any future sales would have to be taken to voters at an election.